Borrowing money

People who provide you with credit or consumer leases must be licensed or authorised by ASIC. They must not give you credit that is unsuitable for you.

How ASIC regulates credit

ASIC is the national regulator for consumer credit and consumer leases under the national credit legislation.

This national credit legislation includes:

National Credit Code – requirements about the entry into, terms and enforcement of credit contracts and consumer leases

National Credit Act – requirements for credit providers and lessors and finance brokers to be licensed and comply with responsible lending requirements.

Licensing

Anyone who wants to engage in credit activities (including lenders, lessors and brokers) must be licensed with ASIC (unless they have an exemption) or be a representative of someone who is licensed – that is, they must either have their own licence or come under the umbrella of another licensee as an authorised credit representative or employee.

You can check to see whether a person is licensed or an authorised credit representative by searching our professional registers.

Holding a licence from ASIC does not mean that ASIC endorses the person or the products or services that the person provides. ASIC must grant a licence if a person shows they can meet basic standards such as training, compliance, insurance and dispute resolution. The business is responsible for maintaining these standards.

ASIC can cancel credit licences and ban people from engaging in credit activities.

You can search our registers for individuals and bodies that have been banned or disqualified from engaging in credit activities.

Responsible lending

Credit providers must not enter into a contract with you that is unsuitable, such as a loan you can’t repay without suffering hardship or a contract that doesn’t meet your requirements and objectives.

By law a credit provider must:

make reasonable inquiries about your financial situation, requirements and objectives

take reasonable steps to verify your financial situation

decide whether the credit contract you are asking for is ‘not unsuitable’ for you.

If you ask for credit, a credit assistance provider must make a preliminary assessment and a credit provider must make a final assessment that the credit contract you are applying for is ‘not unsuitable’ for you before they offer you credit.

Complaints about credit

If you have concerns about a person who provides credit services or consumer leases, or about the way a product is provided, you can lodge a complaint with ASIC.

For guidance on borrowing and managing money, see our MoneySmart website.